An official at the Ministry of Mines and Energy yesterday acknowledged that smuggling and illegal mining, as well as corruption or tax fraud, may have contributed to hundreds of millions of dollars’ worth of discrepancies in data on sand exports to Singapore.

On October 28, the ministry also temporarily halted the export of sand by companies that hold export licences in coastal areas in order to re-evaluate the companies, according to documents obtained by the Post this week and confirmed by several officials. Officials also have temporarily suspended the granting or renewing of licences for sand export, documents show.

The controversy concerns UN data showing $752 million in imports of sand from Cambodia to Singapore since 2007, despite the Kingdom only reporting about $5 million in exports to the small island nation. Singapore’s Trade Ministry statistics closely mirror the UN’s data.

The ministry yesterday officially responded to a group of 47 civil society organisations that on Tuesday had sent a letter to the ministry demanding answers on the discrepancies. In its response, the ministry said that “the responsible management of the sand business still faces some problems”, but that it is “re-examining [the matter] with care”.
“The Ministry of Mines and Energy will take serious actions if it found any irregularities in sand exports,” the ministry’s letter continues. “The ministry . . . wants to emphasise that the ministry has the duty to allow the export of sand with clear procedures and standards and to collect royalties from the export based on the amount exported. And the selling of the sand is not the role of the ministry; it is the business of those who hold licences and the buyers.”

The letter notes that discrepancies may be the result of differences in reporting regimes, but could also be the result of “many factors”.

Yesterday, ministry spokesman Meng Saktheara said those factors may include smuggling and illegal mining, as well as corruption or collusion in misrepresenting export figures for tax avoidance purposes.

“All the above three factors could be plausible,” he said. “The ministry is taking these two last possibilities very seriously.”

Saktheara pointed out that sand export bans by Malaysia and Indonesia in 2007, and Vietnam’s suspension of sand dredging in 2009, caused sand prices in Singapore to spike.

“This price soar has created sand smuggling in the region and wide-spread of sand illegal mining in Cambodia in 2007-2010,” he said, via email. Dith Tina, secretary of state for the ministry, declined to comment yesterday.

Vann Sophath, of the Cambodia Center for Human Rights, which was among the organisations to demand answers from the ministry, said he hadn’t seen the response, but if smuggling and illegal mining were possible contributing factors leading to the massive discrepancies, it would be a loss for everyone.

“The government would have allowed corrupt people to get money instead of the country,” he said. “I don’t think the government should allow this kind of corruption.”

However, he added, “in Cambodia, powerful men influence everything”. The government should act, starting now, in order to halt whatever is behind the discrepancies, he said.

“Otherwise, it will continue and things won’t improve,” he said. “Who will lose? The government and the state.”

Official documents obtained by the Post show that the ministry has begun taking some action.

According to a November 1 letter from Mines Minister Suy Sem to the general director of customs, the ministry indicated it was temporarily suspending the exports of sand of companies that hold a licence for export in all coastal areas.

The suspension was to “re-evaluate all these companies” and decide “which companies are allowed to continue business and which companies must be terminated”.

In an October 28 letter, the ministry said that “to effectively reinforce the managing mechanism and collect income from the exporting of sand resources and reduce some effects, the ministry decided to temporarily suspending the granting or renewing [of] licence and exporting sand” by licensed companies.

Additional reporting by Phak Seangly

Sand Storm: $750 Million Worth of The Material is Unaccounted For in CambodiaRadio Free Asia 2 Nov 16;

Nearly 50 civil society organizations called for the Cambodian government to join some other Southeast Asian nations and ban or severely restrict exports of sand to Singapore after it was revealed that nearly $750 million worth of the building material has disappeared from the country.

U.N. data shows that Cambodia exported $752 million in sand to Singapore over the past eight years, but Phnom Penh only reported that about $5 million worth of sand was exported to the island nation that is the world’s top destination for the material.

“We note the decisions of the governments of Vietnam, Indonesia and Malaysia to ban or restrict sand exports to Singapore due to environmental concerns, and we urge your excellency to consider instituting a similar ban or restriction in Cambodia, in the interests of Cambodia’s long-term sustainable development,” wrote the 47 groups in an Oct. 31 letter to Minister of Mines and Energy Suy Sem.

The vast discrepancy between the official numbers and numbers gleaned from U.N. reports is troubling as sand mining can have severe environmental impact and costs Cambodia’s treasury millions.

San Chey, executive director of the Affiliated Network of Social Accountability, who signed the letter, said corruption could have been the key factor in the unrecorded sand exports.

“We wanted the ministry to be informed of the impact of the sand exports and how it badly impacts the communities,” San Chey told RFA’s Khmer Service. “The ministry needs to find out about this.”

Ministry of Mines spokesman Meng Saktheara admitted that corruption could be a factor, saying the sand could have been smuggled out of Cambodia or sand dredgers from other countries could be using Cambodia to camouflage their own activities.

“This matter is being treated very carefully and as a priority because it involves national budget,” he said.

‘The Ministry has no role in it’

In its official response, however, the ministry attempted to deflect criticism, blaming the use of different reporting regimes by different countries for the differences.

“The ministry admits that it still faces some challenges in managing the sand export businesses,” it said in a statement. “The discrepancies in sand export data could be the result of the different reporting regimes of each country.”

The ministry also emphasized its limited role in the oversight of the businesses involved in the sand trade.

“Regarding the sand sale business deals, the ministry has no role in it,” it said in the statement. “Such deals involve only the companies which are licensed to operate the sand export businesses and the buyers. We are looking into this and will take concrete measures if irregularities are found in the sand export business operations.”

Son Chhay, a senior lawmaker with the opposition Cambodia National Rescue Party (CNRP), told RFA that the assembly’s Anti-Corruption Commission planned to question Suy Sem about the discrepancies soon.

A Hun Sen Family Affair?

In its report “Hostile Takeover: The Corporate Empire of Cambodia’s Ruling Family,” the investigative non-governmental organization Global Witness found links between Prime Minister Hun Sen’s family or their associates and a sand dredging license for a four-kilometer stretch of the Mekong River.

The Cambodian environmental organization Mother Nature Cambodia has accused the government of using “the power of the state…to provide a veneer of legality to the mining.”

“The government claims that Koh Kong [province’s] coastal estuaries naturally carry 'too much sand', and as such need dredging and deepening so that they can be more navigable, and also to reduce riverbank erosion and floods in the area,” the organization writes on its website. “In short, it paints the mining as beneficial to the local fishing communities.”

“Reality though, is much different from that,” the organization added. “Fish stocks have been depleted across the estuaries where the mining is taking place, pollution from the mining barges is close to unbearable to those living nearby, riverbank collapse is endemic, and the only ones that benefit from the alleged benefits of deepening of the estuaries are the large barges that travel upstream to pick up the sand and transport it onto Singapore.”

A worldwide problem

Driven by the growing demand for sand, either for concrete for construction, or in Singapore’s case for expanding its territory, the demand for sand has been outstripping the supply.

According to information in the World Atlas, the United States is the biggest exporter of sand, with Cambodia coming in at number seven. The Observatory of Economic Complexity reports that 97 percent of Cambodia’s sand goes to Singapore.

The world’s sand mining industry is estimated to be a $70 billion a year industry with illegal trade in the material worth even more, according to a 2016 report in The Sydney Morning Herald.

A 2015 report in Wired detailed the emergence of so-called “sand mafias” that use bribery, intimidation and killings to control the illegal sand trade.

Thanks in a large part to the world’s sand, Singapore is 22 percent larger than it was in the 1950s, according to the Sydney Herald report. The newspaper said the island is pushing ahead with plans to import titanic amounts of sand to artificially expand its territory by 6,200 hectares by 2030.

Singapore is getting larger, but the sand mining that aids its growth often wreaks havoc on rivers, deltas, and marine ecosystems in Cambodia and elsewhere.

In 2013 Hun Sen imposed a ban on dredging along the Mekong and Ton Le Sap, and in 2015 the Cambodian government put a hold on new applications for licenses to conduct sand-dredging operations in the country's rivers and lakes in order to study the environmental and social impact, but it is unclear if those moves had any effect, as sand mining appears to be continuing.

At the time of the 2015 announcement, Suy Sem said that there were 142 sand dredging companies operating in Cambodia, but only 37 of them had licenses.

In a 2016 report, the Cambodian Center for Human Rights (CCHR) found the Cambodian government had continued to supply licenses to sand miners despite the bans.

In April the government decided to auction four two-year sand dredging licenses along the Mekong River, under the auspices of “restoring navigation of the waterway.”

Four other licenses were designated “green zone” areas, where “there is no risk of riverbank collapse” while nearly 70 new sand dredging licenses were issued without holding public auctions or requiring the companies to make publicly available environmental impact assessment results.

In all, CCHR found there were 84 companies holding licenses to dredge sand as of May 2016, despite the government’s bans.

Reported for RFA's Khmer Service by Heng Sun. Translated by Nareth Muong. Written in English by Brooks Boliek.

‘Anarchical’ Sand Dredging Eradicated
A total of 80 companies have received sand dredging licenses, of which six are currently operating in
coastal provinces, and more than 20 operate along Cambodia's rivers.
SOK CHAN Khmer Times 4 Nov 16;

In response to an open letter signed to 47 civil society groups on Monday, calling for the Ministry of Mines and Energy to clarify apparent discrepancies in sand export data that suggest a huge disparity in Cambodia’s export figures of sand to Singapore compared to Singapore’s much higher import figures, the ministry issued a reply on Wednesday in which it claimed to have stopped any illegal sand dredging operations.

Monday’s letter from civil society groups was in response to UN data showing sand imports of $752 million from Cambodia over the last 10 years, of which only about $5 million in exports were logged by Cambodia. The UN Commodity Statistics Trade Database shows 2.8 million tons of exports to Singapore, while Singapore reported 72.7 million tons of imports from Cambodia.

In the ministry’s reply to the call for answers and clarification it noted that while many efforts to improve the sector had been successfully undertaken, there were still a number of loopholes to address.

“As a result of the practical work on the reform, we have completely eradicated the anarchical sand business operations along rivers and the sea, and on land, and collected the royalty fees from sand business operation of over $7 million, from mid-2015 until now,” the letter read.

“[However] the responsible management of sand businesses still faces some problems,” it noted, adding that “the selling of sand is not the job of the ministry but it is the business between those who have licenses and the buyers.”

The letter notes that no new dredging licenses have been issued since last Friday, and that it was reviewing all documentation for existing companies. It added that officials were willing to meet with concerned civil society groups to review the data, at a time of the ministry’s choosing.

Following the reporting of the discrepancy by a local newspaper last month, secretary of state for the ministry, Dith Tina, told Khmer Times that any differences suggested by the UN data could be down to the way each country entered data into the UN database. He denied knowledge of any corruption in the sector and said that it was “too quick” to draw any conclusions from the discrepancy.

Yesterday, Mr. Tina said that he was confident that the data his ministry has collected on sand mining is accurate.

“We trust our official figures because we recorded exports of sand as all companies have to apply for a license to export the sand, so we recorded it in order to ask them [companies] to pay royalty fees,” he said.

He said that since 2005 about 10 million tons of sand had been exported to Singapore, for which Cambodia received $7 million in royalty fees. He added that in total 80 companies have received licenses, of which six are currently operating in coastal provinces, and more than 20 operate along the Kingdom’s rivers.

“We will meet with civil society organizations soon and explain to them about the sand issue, and mining and energy that they are concerned with. We will allow them to raise their concerns and questions and then we can explain things to them,” he said.

San Chey, executive director of the Affiliated Network of Social Accountability, which was one of the civil society groups that signed Monday’s letter, told Khmer Times that government talk of boosting transparency and accountability had yet to be translated into reality.

“We welcome the government decision to call for a meeting with NGOs to double check and verify the data on sand exports. Sand dredging is an important issue since some Cambodian people have lost their homes from landslides along riverbanks, and some Cambodians are in jail due to [protesting] the sand issue. So the export sand is not a small story,” Mr. Chey said.

“We are not yet satisfied with the ministry’s clarification, we will ask more questions until transparency and accountability are fully implemented in the sand dredging issue,” he added.

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